Global energy market is in crisis mode this Sunday as the effective closure of the Strait of Hormuz — one of the world’s most critical oil shipping lanes — drives Brent crude prices to their highest levels since June 2022. The international oil benchmark now trades at over $117 per barrel, according to the latest data released by the U.S. Energy Information Administration, marking a staggering $46 increase per barrel compared to February 2026 prices.
The strait, which links the Persian Gulf to the Gulf of Oman, handles nearly 20 percent of the world’s daily oil supply. Since military action began on February 28, the passage has remained effectively closed to commercial shipping. The immediate impact on global markets has been severe. Daily Brent spot prices reached as high as $138 per barrel on April 7, a figure that alarmed governments, central banks, and industries across every continent.
The U.S. Energy Information Administration confirmed in its May 12 Short-Term Energy Outlook that production shut-ins in the Middle East averaged 10.5 million barrels per day in April, with that figure expected to peak at nearly 10.8 million barrels per day in May as storage facilities reach maximum capacity. This forces producers to shut in additional volumes, compounding supply pressure.
For consumers and industries worldwide, the consequences are not abstract. Fuel prices at the pump across Europe, Asia, and Africa are climbing sharply. Airlines are revising routes and surcharges. Fertilizer and food supply chains that depend on energy inputs face cascading cost pressures. In developing nations, particularly across sub-Saharan Africa and South and Southeast Asia, governments face an increasingly difficult balancing act between fuel subsidies and fiscal stability.
Analysts at the International Monetary Fund warned in April that the energy shock will force a downgrade to global economic growth projections. IMF Managing Director Kristalina Georgieva noted at the time that Europe faces a particularly severe impact, describing the situation as a policy challenge demanding decisive government action to avoid repeating the mistakes of past energy shocks.
The EIA now projects that the Strait of Hormuz will remain effectively closed through late May, with shipping flows expected to resume only gradually in late May or early June. Even after flows resume, the agency warns it could take until late 2026 or early 2027 for most pre-conflict production and trade patterns to recover fully. Some producers in the Persian Gulf region may never return to pre-conflict output levels within the current forecast period.
Global oil demand growth has already been sharply revised downward. The EIA now forecasts only a 0.2 million barrels per day increase in demand for 2026, compared to the 1.2 million barrels per day increase projected as recently as February. Governments in Asia have launched emergency fuel economy programs. China, the world’s largest oil importer, has ordered fuel rationing measures across several industrial provinces.
The energy crisis is reshaping diplomatic priorities at a remarkable speed. The United States and European Union are in active talks with major non-Gulf producers including the United States, Canada, Norway, and West African nations to accelerate alternative supply flows. Nigeria and Angola have seen urgent diplomatic outreach as Europe and Asia seek to reduce dependence on Middle Eastern crude.
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For investors, the picture combines extreme volatility with high risk premiums. Energy sector stocks have surged, while airline, shipping, and manufacturing equities have declined sharply. Gold and silver prices have also climbed as investors seek safe-haven assets amid growing uncertainty about the duration of the disruption.
The critical question facing policymakers, markets, and citizens worldwide right now is straightforward: how long will this last? Based on current assessments, the answer is far longer than most initially hoped.
